Vat

Options
twinmeister
twinmeister Registered Posts: 122 Dedicated contributor 🦉
in AAT Level 3 (Level 6 in Scotland)
Have forgotten whether Tutor said we would be using 17.5% or 15% for this week's FRA exam. Does anyone know?
Also totally forgotten the quick way of working back with VAT. Something along lines of 47/9? Or 49/7 for 17.5%. Can anyone refresh my creaking brain?
TA

Comments

  • lork
    lork Registered Posts: 97 Regular contributor ⭐
    Options
    I think it said in a recent AAT magazine that they intend to keep the rate at 17.5%. I would imagine they will announce it at the start of the exam like they did in December.

    To work VAT out backwards, I divide the number by 1.175 to get the net figure. The difference between the two is obviously the VAT figure.
  • twinmeister
    twinmeister Registered Posts: 122 Dedicated contributor 🦉
    Options
    Thanks lork. Now if you could just explain why the sun always shines when you have to revise, you'll go to the top of the class. Accounting standards chapter for FRA just not holding my attention. Garden calling. Facebook calling. Chocolate muffins calling. In fact pursuit other than making notes on FRSs and SSAPs.
    Can we just press pause for a week?
  • lork
    lork Registered Posts: 97 Regular contributor ⭐
    Options
    LOL! Can't help with that one, I'm afraid. I find doing 30 mins revision followed by a 2 hour break helps wonders!
  • any2002uk
    any2002uk Registered Posts: 88 Regular contributor ⭐
    Options
    hi

    so will it be confirm the FRA will be using 17.5. for example to find VAT.
    £1000 NET x 17.5%= £175 VAT? is that right? so the total is £1750.
    £1750 to find VAT seperate = £1750x17.5/117.5= £750 is that right?

    if it is 15% then £1000x15%=£150
    Total £1500, to find VAT = £1500x15/115? i don;t know how to do it.
  • Gem7321
    Gem7321 Registered Posts: 1,438 Beyond epic contributor 🧙‍♂️
    Options
    You've got the right calculation but your answer is wrong, 1000 x 17.5% = 175 = 1175, not 1750.

    So 1175x17.5/117.5 = 175

    It is definitely 17.5%, it was released in the AAT magazine but if it were 15% your calculation of x15/115 would be correct
  • keane155
    keane155 Registered Posts: 404 Dedicated contributor 🦉
    Options
    I use x7 /47 to find out the VAT amount. (at 17.5%)
  • twinmeister
    twinmeister Registered Posts: 122 Dedicated contributor 🦉
    Options
    VAT - quick calc x7/47 (17.5%) for 15% VAT rate

    Thanks, that's the one I was struggling to remember 1175 x 7/47 = 175. Perfect.

    Any idea what the quick calc working backwards from gross 1150 for 15% would be? e.g. 1150 x something / something to give 150 VAT?

    ta
  • keane155
    keane155 Registered Posts: 404 Dedicated contributor 🦉
    Options
    I think x6 /46 works for 15%
  • mrspnut
    mrspnut Registered Posts: 70 Regular contributor ⭐
    Options
    I find that really confusing, I just multiply or divide by 1.175 or 1.15 depending on the rate.

    Multiply to add VAT, divide to find net value
  • any2002uk
    any2002uk Registered Posts: 88 Regular contributor ⭐
    Options
    how come no one from AAT board offical moderator is here to clarify whether we use 17.5% or 15% for FRA exam within 3 days left!!!!!!!!!!!!!!
  • mrspnut
    mrspnut Registered Posts: 70 Regular contributor ⭐
    Options
    It will probably be 17.5% the new rate is only a temporary reduction but if you used 15% then they could not penalise you unless the specifically stated which rate to use.
  • lork
    lork Registered Posts: 97 Regular contributor ⭐
    Options
    There will more than likely be an announcement at the start of the exam regarding the VAT rate, as there was in December. As we've previously stated, it was also confirmed in the AAT magazine recently that it will stay at 17.5%.

Categories

Privacy Policy